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Clyde & Co achieves successful strike out of incubated portal claim

  • 25 November 2020 25 November 2020
  • UK & Europe

Clyde & Co has successfully applied for the strike out of a personal injury claim for an abuse of the Part 8 process. Whilst the recent decision in Cable v Liverpool Victoria was a blow to insurers in respect of portal incubation issues, it was apparent that the decision would not necessarily mean the strike out of a claim for abusing the Part 8 process would be precluded.

Clyde & Co achieves successful strike out of incubated portal claim

Samuel Hall v (1) Birmingham Steel Erection Services Limited, (2) Frank H Dale Limited, (3) Mclaren Construction Limited

In our recent success, we successfully submitted that the abuse of process had prejudiced our client and that a strike out was the only appropriate sanction due to the exceptional nature of the tactics adopted by the Claimant’s representatives. When compared to Cable, where it was found that the claimant's treatment or possible rehabilitation was not affected by the incubation, we successfully argued that our client was left unable to examine the Claimant, assess the credibility of the alleged injuries and assist with the rehabilitation of those injuries, if they were genuine.

 

Background

The Claimant was working with a number of colleagues and moving a portacabin, on a project to build a new shopping centre. The Claimant slipped on cortex boarding left behind by groundworkers. The boarding was covered in frost and was slippery.

The main contractors on site were the Third Defendant (D3). Our client, the Second Defendant (D2), was subcontracted by D3 to undertake all steel fabrication and erection. Our client in turn subcontracted the erection aspect to the First Defendant (D1) who employed the Claimant.

The claim was initially submitted to the Claims Portal as an employers’ liability (EL) claim against our client. Our client’s insurer had previously advised that our client was not the Claimant’s employer and to not submit it to the EL portal. It was confirmed by our client’s insurer on 4 August 2017 that the Claims Notification Form (CNF) had been rejected as D1 employed the Claimant but that the claim should be also be directed to McLaren Construction as the principal contractor (D3). Liability was also denied at that stage.

Part 8 proceedings were not issued until 2 February 2018 and the CNF against D3 not submitted until 21 February 2018. The Claimant was aware that the potential claim had exceeded the portal limits by this stage and had taken no prompt action to submit a CNF against D3 following our client's insurer's email dated 4 August 2017.

The Claimant suggested that a Fourth Defendant be brought into the claim, and that the Defendants agree liability between them. Our response was that that was entirely inappropriate and the Claimant should identify those defendants against whom he could pursue a claim.

We successfully applied to have the stay in place limited to four weeks and for the matter to be transferred to Part 7. The Claimant applied to set that order aside and to reimpose the stay. A hearing was listed. A further application by the Claimant was served ahead of that hearing seeking to add the proposed Fourth Defendant to proceedings. At that hearing in October 2019 the court adjourned the second application and confirmed the stay remained lifted with the case to proceed to Part 7.

 

Application

We submitted an application to have the case struck out for abuse of process dated 20 January 2020 having sought updated medical evidence which was required, to include a review of medical records to further consider causation and quantum without success. We argued that the court should have oversight of higher value claims, that these must be identified early and taken out of the portal referencing at that time Lyle v Allianz. The Claimant’s representatives had not regularly reviewed the value of the claim and were well aware the Claimant had been off work for over 4 years. The significant delays caused prejudice to all the Defendants, as despite the denials of liability, the claim had been issued via Part 8, leaving the Defendants unable to positively progress the claim, or have any handle in obtaining medical evidence.

This application, and the Claimant’s outstanding application to add a further defendant, was adjourned for a period of several months. In the months that followed our initial application, both D1 and D3 made similar applications for strike out for abuse of process.

 

Outcome

The applications were heard by the Court in November 2020. We invited the Court to rely upon the judgment in Cable v LV and apply a two stage approach:

  1.  Was there an abuse of process?
  2. What is the appropriate sanction for that abuse?

The judge accepted that the findings within Cable v LV should be applied.

The judge agreed there was an abuse of process and in particular there were no fewer than five specific abuses:-

  • The Claimant issued Part 8 proceedings where the value of the claim was in excess of £25,000;
  • Liability had been firmly disputed since 2017;
  • Staying the claim and thereafter using the Part 8 procedure to restrict the Defendants' involvement concerning a claim with an estimated value over £100,000, including attempting to continue the stay and object to that being lifted despite a Schedule of Loss served in May 2019 at over £100,000;
  • Incorrectly using the Part 8 procedure to escape from limitation issues that were raised with the Claimant; and
  • Using the Part 8 procedure, generally, to delay the litigation.

The judge further found that the Claimant and his representatives effectively doubled down on the abuse of process by requesting the claim be stayed on no less than two occasions at a time when they were aware of the value and the liability position.

Having found there was an abuse, the judge then had to decide the appropriate sanction and whether the circumstances were exceptional, such that strike out was an appropriate sanction. Following our submission, in the judge's view, the circumstances were exceptional and strike out was the appropriate sanction.

He formed the view that the time cannot now be made up to remedy the issues with the medical evidence and the general evidence of the case is now at risk given the time since the incident occurred. Furthermore, the disclosure exercise is incapable of being restored and the imposition of a costs sanction is not sufficient when assessing the prejudice to the Defendants. The correct response in his view was to strike out the claims against our client, D1 and D3.

In respect of costs, as the claim was struck out due to an abuse of process, costs are enforceable as an exception to QOCS. The judge ordered the costs on an indemnity basis and given the time afforded to the court, costs are to be assessed if not agreed.

 

What can we learn?

  • As we stated in our analysis of the decision of Cable v LV, it was apparent that courts would continue to accept that a strike out of a claim may be appropriate in certain circumstances where that claim has been incubated.
     
  • However, this decision should give a useful indication to insurers and defendant representatives in terms of those circumstances under the two stage test which would justify a strike out as being the most appropriate sanction.
     
  • Continued chasers for evidence where appropriate to be served, or advised to be following, and to seek updates as to the position can strengthen our position that we used our best endeavours;
     
  • A detailed timeline of the Claimant's conduct can assist the court in understanding where the abuses may lie.

End

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